Although Canada is a very large country, most of its landmass is not nearly as hospitable, useful, or attractive for economic development as land elsewhere in North America. The vast majority of Canada's population lives within a narrow strip along the border with the US. So just comparing the size of the two is not very useful. When you look outside of this border region, the population density is not very different than the less-populated regions of the Great Plains and Northern Rockies.

Another reason for the disparity is that Canada never received the kind of mass immigration from Europe (and later East Asia and Latin America) the United States did. It didn't offer people the same opportunities for work or free farmland, and people within the British Empire would have been able to relocate to many other places.